So at midweek the market looks to be starting a correction that could continue thru Sept imo. After yesterday being one of the strongest sells I have seen all summer with volume the highest since early May and internals weak as can be; the path of least resistance appears to be lower for now. Remember how far we have came in the last 6 months. The SPX ran from 666 to 1039. Support levels below here sit at 980, 968, 950. The 200 day ema on the SPX stands at 954 and has been relatively flat all summer as it based out and tried to curl higher. If this market does eventually lose 950 then I must caution a gap fill zone down at 905 that will be waiting. I think we at least see a bounce off that 950 area and we will see how the market reacts to it.
As for the rest of this week, we have the ECB interest rate decision tonight in Europe and that should get the currency markets moving before the stock market opens. If the Euro fails at 1.42 area then it could fall very fast. That would put pressure on stocks. Also friday's jobs report is what everyone is waiting for so it should be interesting but like I said, the markets feel heavy and due to correct further this month imo.
Gold is the big chart breakout of the week so far and I will try to do a post on that trade as well. I think we saw a multi month breakout in gold today and at the same time long term bonds rallied to new relative highs. This is troubling for now as it could point to new worries over the flow of credit going into the fall. For now I am keeping a negative tilt to my bias and watching the above support levels to see how the markets acts if it gets to them.